Asset Allocation Update US yield curve and equities dancing to different tunes The resilience of the US stock market over the past month or so is hard to square with recent inversions in parts of the US Treasury yield curve. While we do not think that these inversions... 6th April 2022 · 4 mins read
Middle East & North Africa Economics Update Tunisia heading toward default Political developments and spillovers from the war in Ukraine have compounded concerns over Tunisia’s public finances and cemented our view that the government will default sooner rather than later... 6th April 2022 · 3 mins read
Capital Daily What to make of the return of “Le Pen risk” in Europe The recent polling shift in favour of far-right candidate Marine Le Pen ahead of France’s presidential election is starting to affect financial markets. If the experience of the last election in 2017... 5th April 2022 · 6 mins read
Global Markets Update The global tightening cycle and bond yields This tightening cycle looks set to be much more synchronised across developed market economies than the last one, which we think creates more scope for rises in bond yields across countries but could... 5th April 2022 · 4 mins read
Capital Daily Real yields and the relative performance of growth and value Although the 10-year TIPS yield may appear to have lost its influence on the relative performance of the growth and value factors in the US stock market since mid-February, we suspect this is just a... 4th April 2022 · 5 mins read
Asia Economics Update Flaring political risks a major threat in South Asia A constitutional crisis in Pakistan threatens to scupper its deal with the IMF, which would throw its already-precarious external situation into very dangerous territory. Meanwhile, political meltdown... 4th April 2022 · 3 mins read
FX Markets Weekly Wrap Dollar treads water amid global tightening cycle Another solid gain in US payrolls did little to boost the dollar today, which seems set to end the week little changed against most major currencies. During the course of this week, central banks in... 1st April 2022 · 9 mins read
Global Markets Update We don’t think China’s stock market is set to surge While we suspect the recent recovery in the MSCI China Index may have further to run, we don’t think the stage is set for a big rally either. 1st April 2022 · 3 mins read
Capital Daily The Treasury market may yet make fools of investors in US equities Although the US stock market has often shrugged off rising Treasury yields at the outset of a Fed tightening cycle, we don’t think this is bound to continue if, contrary to our central scenario, oil... 1st April 2022 · 7 mins read
US Economics Weekly Long rates rising but still low, particularly in real terms The inversion of the 10y-2y Treasury yield spread this week led to predictable speculation that the Fed’s interest rate hikes would quickly push the US economy into recession. 1st April 2022 · 7 mins read
Asset Allocation Update What Russia’s exclusion means for MSCI’s EM EMEA Index Even though the ejection of Russia from the MSCI EM EMEA Index has changed its country and sector composition, we doubt that this will meaningfully change how it tends to behave. Our forecasts for... 1st April 2022 · 3 mins read
China Economics Focus What will China do with its FX reserves? In adapting to the threat of having its foreign exchange reserves frozen, the People’s Bank is likely to shift more of its portfolio into unconventional alternatives, including EM sovereign debt and... 1st April 2022 · 19 mins read
Asset Allocation Chart Pack Stocks may lag bonds if commodities keep on surging Given that the past couple of months has seen the outbreak of war in Ukraine, surging commodity prices, growing concerns about inflation, and increasingly hawkish noises from the world’s major central... 31st March 2022 · 13 mins read
FX Markets Chart Pack We think the dollar rally has stalled, not ended The rally in the dollar seems to have paused this month, and indeed the greenback has fallen against some major currencies – especially those in Europe – this month. We think this largely reflects the... 31st March 2022 · 6 mins read
Capital Daily We think Chinese equities might continue to struggle We think China’s stock market will continue to struggle, as the slowdown in global growth that we forecast weighs on earnings and valuations make little headway. 31st March 2022 · 6 mins read
Capital Daily EZ inflation surprises suggest sell-off in bonds may resume While the sell-off in euro-zone government bonds has paused today despite the release of some stronger-than-expected inflation prints for Germany and Spain, we think that there is scope for it to... 30th March 2022 · 6 mins read
